France Africa
Weapons and Kit

The Buyer's Guide To Building An Army

How does the international defence industry work? Who are the biggest buyers and sellers of weaponry? And who regulates it all?

France Africa

We have all been there, right? You wake up on a Monday morning, and top of the to-do list is raising an army and equipping it properly. You need uniforms, boots, rifles. And then you need some armour, conceivably a few hundred second-hand main battle tanks and armoured personnel carriers.

Why stop there? If your budget permits, there will always be some naval assets for sale somewhere. Often, governments are literally giving away their no longer required warfighting equipment. 

OK … so, maybe it is not that straightforward. But, if you were responsible for a nation's military hardware procurement, were accredited properly and buying from legitimate sellers like the UK Government, there are many possibilities out there. 

The international defence industry is a vital contributor to the global economy. In 1990, it accounted for 4% of the world's entire GDP. 

After a couple of decades of decline, since 2014 it has been steadily growing again. In 2019, across the exporter market, there was an 8.5% increase in value. The UK was second only to the USA in terms of totals sold, accounting for 16% of all defence deals internationally. 

Typhoons taxi at RAF Akrotiri before night mission
MOD

What Is Available?

At the time of writing, a reasonably quick browse of the internet led BFBS to legitimately available-to-buy military hardware within the UK. We are not talking about used desert combats or water bottles on well-known online marketplaces, but actual sophisticated equipment designed to provide effective military capability. 

Those online inquiries led us to seven RAF surveillance aircraft, including two AWACs and five Sentinel aircraft.  

The assets appeared online in December 2020 alongside a Ministry of Defence invitation to tender document calling for applications to take responsibility for the aircraft. There was a snag though – a pretty big one if your intentions were to put the equipment into use immediately – the seven items were not being made available to fly.

The successful bidder would not be allowed to take them away from their current locations intact. So, what were they for?

AWACS
From December 2020. DESA was handling the sale of seven RAF aircraft, including two AWACS'. Credit: Crown

The website stated that the "proposed sale of the aircraft" was for "stripping so to harvest all reusable parts for potential resale, recycling or disposal and final dismantling and removal of the remaining platforms. 

"Note: these aircraft are not for reuse."

DESA – the Defence Equipment Sales Authority – did not want to be drawn on the specifics around the seven aircraft due to the on-going status of their procurement process. Nevertheless, they were willing to provide an overview of the expectancies it held towards any potential buyer.

A spokesperson said: 

"DESA follows a rigorous commercial process which tests the capability and capacity of any potential contractor to ensure they have the right qualifications and expertise in place to fulfil the requirements of any contract awarded."

Air Salvage International are currently enjoying a boom due to the Covid impact on international travel and airlines. Credit: ASI

However, an organisation that would provide insight into what the seven aircraft might unlock in terms of value or effectiveness is Air Salvage International (ASI).

ASI is a specialist aircraft salvage business based in the Cotswolds. Currently enjoying a boom in the market due to the world's major airlines contracting significantly because of the slowdown in international travel thanks to covid 19, ASI has on its airfield over 50 aircraft, many of which are Boeing 747s that until recently belonged to British Airways, Virgin Atlantic and QANTAS.

Talking to BFBS, ASI's Global Sales Manager, James Cobbold, outlined the key issues confronting the MOD as they look to attract a buyer for the aircraft.

"Commercially, the value lies in the components of the aircraft, which can be refurbished and sold on within the industry," Mr Cobbold explained to BFBS.

"However, you cannot just take them off and put them on something else.

"Military wise, the market is very limited. You need to identify countries who still operate the aircraft. Even then, there will not be much value in the parts. The cockpits alone are 30 years old and there will be questions over hazardous materials. I cannot see there being a large amount of value in these assets."

ASI take aircraft and strip them of valuable parts to be refurbished and resold within the international air travel industry. Credit: ASI

Ships Of Several Navies

Like aircraft, ships are considered 'capital assets', which is another way of saying they are high-value, and by coincidence, serious bits of kit. The cost of a new asset can be eye-watering expensive, like the UK's latest aircraft carriers HMS Queen Elizabeth and Prince of Wales. The pair cost the British taxpayer an enormous £6 billion. Perhaps then, it should come as no surprise governments worldwide look to selling their old ships to other countries once they have become too old to keep. But as we will see, they do not always have to be friendly nations. It seems that where the selling of expensive old assets like warships are concerned, business is business.

Hansard records reveal the dissatisfaction felt by some in the House of Commons over the potential sale of HMS Ajax to Chile, in June 1948, when we were on less than friendly terms. The matter of selling such an asset also provided some MPs with a means to goad the government over the Royal Navy's ever-shrinking size. 

The Hansard record reads:

Commander Noble asked the Parliamentary Secretary to the Admiralty whether he has any further statement to make on the negotiations regarding the transfer of HMS "Ajax" to the Government of Chile; and if the date of transfer has yet been fixed.

Mr Dugdale [Parliamentary Sec to the Admiralty]: No, Sir.

Commander Noble [Member of Parliament for Chelsea]: Does not the Minister consider it rather illogical that we should be considering transferring a ship to a country with whom we have an outstanding dispute before the International Court?

Mr Dugdale: I have said that the matter is under consideration. In due course, a statement will be made.

Mr J. P. L. Thomas: Has the Board of Admiralty taken into consideration the feelings of the Royal Navy when they see the historic "Ajax" flying the Chilean flag in Valparaiso harbour?

Mr Dugdale: I have no doubt that we shall certainly take into consideration the feelings of the Royal Navy, and they will be expressed to us by those now serving in the Royal Navy.

Vice-Admiral Taylor [Member of Parliament for Paddington South]: Is not the Parliamentary Secretary aware that when H.M.S. "Ajax" is sold to Chile, the cruiser force will be reduced and that a force of 50 cruisers is totally inadequate for this country in the event of war?

Sir Ronald Ross: Will the Parliamentary Secretary make it a condition precedent of the sale of a ship to any foreign country that that foreign country should evacuate any illegally occupied British territory?

Mr Dugdale: No, Sir. Obviously, that is a question for my right hon. Friend the Foreign Secretary.

Winston Churchill on HMS Ajax during WWII
Winston Churchill on HMS Ajax during WWII. Credit: Crown

HMS Ajax would not, it would transpire, be sold to Chile or anybody else for that matter (India was also considered a viable buyer). In 1949, just a year after those heated exchanges, HMS Ajax was towed to Newport, South Wales, and broken down. Winston Churchill had intervened personally over preserving the ship's dignity by not selling it on to another Navy.

HMS Ocean as Brazilian flagship Atlantico
Atlantico, formally HMS Ocean, is now the flagship of the Brazilian Fleet. CREDIT: BRAZILIAN MOD

Who Is Buying?

According to SIPRI (Stockholm International Peace Research Institute), the top five international arms importers over the five years to the end of 2018 were Saudi Arabia, India, Egypt, Australia, and China. Within the same data, the UK is ranked as the world's sixth-biggest exporter and the 18th most extensive buyer. 

More recently, Royal Navy vessels have been sold under more favourable circumstances than those of HMS Ajax's final months in the 1940s. 

In 2018, Forces News reported on the transfer of HMS Ocean to the Brazilian Navy. DESA, who handled the deal, reportedly sold the vessel for £84 million. The helicopter carrier is now known as PHM Atlântico and is used for maritime security operations under the Brazilian flag.

DESA explicitly referred to HMS Ocean when BFBS asked the department for more information on the types of assets sold in recent times. 

"DESA have high performance stats, and for the financial year 2019 / 2020, DESA sold equipment such as HMS OCEAN, CVR(T) to Latvia, trucks to Finland and aircraft to Bangladesh, Bahrain and the United States." – a spokesperson said.

Sales like HMS Ocean to the Brazilian Navy represent an ever-aware consciousness by the UK Government of financially getting the most out of surplus military equipment for the British taxpayer.  DESA's strategic objectives explicitly state that they exist to 'maximise the receipts for the MOD.'

UN Headquarters New York
The UN Building in New York where the Arms Trade Treaty was designed. Credit: Shutterstock

Oversight And Law

A somewhat extreme depiction of defence dealing was presented by Todd Phillips in the 2016 film War Dogs. Starring Jonah Hill, the movie told the true story of American arms dealers Efraim Diveroli and David Packouz. In 2007, the pair landed an extensive contract with the US Government to supply weapons and ammunition to the Afghan Army. Two years later, they faced prison for breaking federal laws after procuring weapons from China - explicitly outlawed under the law.

The Afghan Army contract was worth $298 million to the young Americans.

In the UK, DESA said their contracts have competed through the Official Journal of the European Union tender procedures, are regularly audited against strict contractual obligations, and are compliant with environmental and health and safety regulations. 

Adjacent to domestic laws, such as those in the US that brought Diveroli and Packouz to justice in 2009, conventional weaponry sales are regulated internationally by the Arms Trade Treaty (ATT).

The ATT is a relatively new piece of international legislation. Still, since its creation under the United Nations' auspices in 2013, 109 states have ratified or acceded to it, including six of the world's top ten arms producers. 

Significantly, though, the worlds no.1 arms trader - the USA - is not a signatory to the ATT, and neither is Russia.